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Overcoming Bias Commenter's avatar

Read the prospectus & online for the fee adjusted return vs the benchmark. The YTD is always less, but look at the 5 yr,10 yr,etc..

Mutual funds are great just pick ones that outperform the index in the long run and don't be a squirrelly shorter. For avoiding taxes put your funds in a tax sheltered account. People say MOST funds =fail but that is the whole purpose..pick one that outperforms. I mean look at CWGIX/Dodge and Cox.

If you are going to be that simplistic then most new businesses fail..so investing in new business won't make you $?

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Overcoming Bias Commenter's avatar

investors who overcome overconfidence bias and invest in index funds earn much higher average returns than investors who think they can beat the market by investing in actively managed mutual funds.

You are really stretching the evidence to make this claim. Most active fund managers fail to beat their relevant benchmarks, but this says precisely nothing about the returns I see on my statement. My behavior has far more to do with it than which funds I'm investing in. Overconfidence might be a small part of it, but there is a veritable stew of biases which affect investor decision-making.

That's why there's, like, a whole academic field devoted to the topic.

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